Change to CPB rules asks stations to share more about executive salaries

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CPB has taken steps to clarify its rules for disclosure of salaries paid to top executives of public broadcasting stations.

The move, aimed mainly at stations owned by universities, states and other institutions, builds on CPB’s recent efforts to require pubcasters to publish information about board meetings and financial performance on their websites. CPB and its Inspector General have found that many stations aren’t complying with these regulations.

In the case of salary disclosure rules, some stations owned by universities have reviewed CPB’s rules and determined that the provision doesn’t apply to their executives.

Unlike community-licensed stations, which must report salaries of top executives annually in their tax documents, stations that operate within a university or other institution are exempt from filing IRS Form 990s. Starting with television in fiscal 2012, CPB began requiring these stations to post “comparable” salary information on their websites if they are to maintain their eligibility for annual Community Service Grants.

Current’s examination of financial documents at 85 public stations in the top 25 markets found 11 stations, mostly university licensees, that had not posted salary information. Top managers at some stations told Current that, under advice of counsel, they’re not releasing salary information for station staff.

Most of those who explained their decisions not to release the information said they interpreted CPB’s salary disclosure rules to apply to top leaders of their licensees, not station management. Others said the rules don’t apply to salaries under $100,000.

‘Interested in transparency’

Late last month CPB attempted to resolve the confusion about salary disclosures by tweaking its grant rules for CSG recipients.

A clause included in the CSG requirements for fiscal year 2016 says, “The information that university, state and local authority Licensees post may be limited to their station operations.”

In other words, CPB expects CSG recipients to report station salaries, not compensation for top officials at the university or state licensee.

“CPB is interested in transparency concerning the highest compensated officials responsible for operating the grantee’s station, not the salaries of others such as university presidents who may be ‘licensee/grantee’ officials but not directly involved in managing the station,” wrote Letitia King, CPB spokeswoman, in an email.

The change took effect for the CSG grant cycle that started in October, King said, and will be applied retroactively. She recommended that stations update their websites with the salary information.

For those licensees that don’t file a 990, and are barred by state law from disclosing compensation, CPB will consider requests to be exempted, King said.

Robert Winteringham, a former CPB attorney who advises stations on grant compliance, said the new clause doesn’t really change anything: University-owned stations that don’t release salary information aren’t violating CPB’s grant rules.

Winteringham has worked with stations on salary equivalency compliance as a consultant with Public Media Consulting Group. He advises his clients who fall into this gray area to post the salary information for leadership of their licensee, which is the official recipient of the CSG. He sees the decision to withhold the information as following the letter of the law within the CSG rules, not an issue of transparency.

He points to use of the word “grantee” in the CSG rules, and says CPB’s own grant provisions define a grantee as the recipient of CSG funds — the licensee, not the station itself.

“I can only go by what the general provisions say,” Winteringham said. “And, in the general provisions, the grantee is defined as the licensee.”

The new clause that CPB added to its rules won’t have its intended effect, he said, because it is weakly worded. A clause says licensees may limit salary information to those operating the station. A more straightforward clause would say they must, he added.

“My opinion hasn’t changed,” Winteringham said.

The conflicting interpretations over disclosure factored into Current’s study of executive compensation in public media, which found variation in how university-operated stations treat CPB’s salary disclosure rules. For the study, Current gathered executive compensation information for 74 public broadcasters operating in the top 25 designated market areas as defined by Nielsen. TRAC Media Services and Radio Research Consortium provided lists of stations whose signals reach into the top markets.

Current collected salary and budget information for the stations from IRS Form 990s, audited financial statements and databases of university salaries. Most licensees provided information in a 990 or an equivalency statement, as required under CPB’s transparency rules for CSG recipients.

All but one of the 11 organizations without the salary equivalency disclosures were licensed to public or private universities. Miami’s WDNA-FM, a community licensee, released its 2014 Form 990 but did not report salary information on it. Current contacted executives at all of the stations to request the documents.

As of press time, university licensees that had not sent or posted salary equivalencies included Temple University’s WRTI-FM; Fordham University’s WFUV-FM; Howard University’s WHUT-TV; Gaston College’s WSGE-FM; Clark Atlanta University’s WCLK-FM; California State University, Long Beach’s KKJZ-FM; Boston University’s WBUR-FM; and American University’s WAMU-FM. Of these, WRTI, KKJZ, WCLK and WSGE didn’t respond at all to Current’s inquiries.

Some university licensees interpreted CPB’s rules for salary disclosure differently, aligning themselves with CPB’s expectations for transparency. St. Louis Public Radio, licensed to the University of Missouri-St. Louis, posts a Form 990 equivalency statement because its leaders recognized the intention behind CPB’s rules, according to President Tim Eby.

“When the compliance guidelines have come out, we’ve paid attention to them, and I feel it’s important to comply with them,” Eby said. “We interpreted it as asking for station salaries.”

News and jazz station KJZZ, in Tempe, Ariz., also decided more information is better. Operated by Rio Salado College and Maricopa Community Colleges, the station could have opted to withhold its salary information from the public record. KJZZ decided to publish it, said GM Jim Paluzzi.

“It’s information that is normally already out there anyway,” Paluzzi said. “It’s really about transparency; we don’t have anything to hide, and we should just be open about it.”

Compliance with CSG grant rules, particularly those related to open meetings and community advisory boards, has been a recurring problem for local stations. It’s become more urgent over the past few years as CPB has tightened rules for stations to post more information on their websites. Stations that don’t comply put themselves at greater risk for financial penalties because CPB’s Inspector General’s office can easily check their websites.

A report presented at the Public Media Business Association conference in May revealed that two-thirds of CSG recipients audited since 1999 didn’t comply with at least some provisions of the Communications Act, which require transparency and openness in various areas of station operations. The study looked at 83 public radio and TV stations and found that 56 were out of compliance with at least one Communications Act requirement.

An audit report released by the CPB Office of the Inspector General in September found a “high level” of noncompliance among 10 small public radio stations receiving CSGs. Inspector General Mary Mitchelson wrote that stations fell short of requirements regarding open meetings, financial reporting and community advisory board activities. The report noted that nine stations failed to post required information on their websites.

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